Nearby Systems v. Dairy Queen: Location Tech Patents Dismissed With Prejudice in 212 Days
Nearby Systems LLC asserted three US location-based service patents against Dairy Queen’s DQ Texas App and Dairy Queen Food & Treats App in the Eastern District of Texas. The case resolved in just 212 days via a stipulated dismissal — Plaintiff’s claims dismissed with prejudice, Defendants’ counterclaims without prejudice, each party bearing its own costs.
Three location patents, one fast exit: Nearby Systems v. Dairy Queen unpacked
Filed on 7 January 2025, Nearby Systems LLC brought a patent infringement action in the Eastern District of Texas against International Dairy Queen, Inc., American Dairy Queen Corporation, and Texas Dairy Queen Operators Council. The suit centred on three US patents — US11937145B2, US10469980B2, and US9532164B2 — covering location-based mobile service technologies, asserted against Dairy Queen’s consumer-facing DQ Texas App and Dairy Queen Food & Treats App.
The case closed on 7 August 2025 via a Rule 41(a)(1)(A)(ii) stipulated dismissal — a mechanism requiring no court approval and reflecting bilateral agreement. Plaintiff’s claims were dismissed with prejudice, permanently extinguishing Nearby Systems’ right to re-assert the same claims against these defendants. Defendants’ counterclaims were dismissed without prejudice, preserving Dairy Queen’s ability to revive those claims in future proceedings if circumstances warrant.
Resolution in 212 days — before typical claim construction proceedings would conclude in E.D. Texas — is consistent with a negotiated settlement reached shortly after the case was filed and served. The mutual ‘own costs’ order reinforces the bilateral nature of the resolution. The public record does not disclose any financial terms, licence grant, or the substance of Defendants’ counterclaims, leaving the commercial outcome largely opaque beyond the procedural record.
Filing to Dismissed with Prejudice in 212 days
212-day resolution — well below the E.D. Texas median for multi-patent infringement cases, suggesting early settlement
Dismissed with prejudice: what the stipulated exit means for both sides
Rule 41(a)(1)(A)(ii) ends the case without a merits ruling
A stipulated dismissal under Rule 41(a)(1)(A)(ii) is a bilateral procedural exit requiring signatures from all parties — no judicial approval of the merits is needed. The court simply accepts and acknowledges the parties’ agreement. This means no infringement finding, no invalidity ruling, and no claim construction opinion enters the public record. The patents-in-suit are neither validated nor invalidated by this outcome.
No merits adjudicationWith-prejudice dismissal bars Nearby Systems from refiling these claims
Dismissal with prejudice operates as a final adjudication on the merits for res judicata purposes. Nearby Systems cannot reassert US11937145B2, US10469980B2, or US9532164B2 against International Dairy Queen, American Dairy Queen Corporation, or Texas Dairy Queen Operators Council in any future action arising from the same accused products and conduct. This is a permanent bar — not merely a procedural pause. Whether any consideration was exchanged in connection with this agreement is not disclosed in the public record.
Permanent claim bar vs. these defendantsCounterclaims dismissed without prejudice — Dairy Queen retains optionality
Dairy Queen’s counterclaims — which likely included declaratory judgement of non-infringement and/or invalidity of the asserted patents — were dismissed without prejudice. This asymmetric structure is notable: Dairy Queen preserves the right to revive its counterclaims, including potential invalidity challenges to the three patents, should Nearby Systems assert them against other defendants or in related proceedings. The without-prejudice carve-out is a standard but strategically meaningful concession by the plaintiff.
Dairy Queen retains invalidity optionalityLocation tech patents survive unchallenged — third parties remain exposed
Because no invalidity or non-infringement ruling was entered, US11937145B2, US10469980B2, and US9532164B2 remain in force and presumptively valid. Nearby Systems retains full freedom to assert these patents against other quick-service restaurant chains, retail mobile app operators, or any party deploying location-based notification or check-in features. Competitors to Dairy Queen operating similar mobile ordering and proximity-based service apps should treat this outcome as a litigation risk signal rather than a clearance event.
Patents remain enforceable against third partiesFull party and counsel information
| Role | Name | Type | Detail |
|---|---|---|---|
| Plaintiff | Nearby Systems, LLC | Company | Location technology patent licensing entity — holder of US11937145B2, US10469980B2, and US9532164B2Search in Eureka ↗ |
| Defendant | International Dairy Queen, Inc. | Company | International Dairy Queen, Inc. — quick-service restaurant franchisor operating consumer mobile ordering appsSearch in Eureka ↗ |
| Plaintiff counsel | Carey Matthew Rozier | Attorney | Counsel for Nearby Systems, LLCSearch in Eureka ↗ |
| Plaintiff counsel | James Francis McDonough , III | Attorney | Counsel for Nearby Systems, LLCSearch in Eureka ↗ |
| Plaintiff counsel | Jonathan Lloyd Hardt | Attorney | Counsel for Nearby Systems, LLCSearch in Eureka ↗ |
| Plaintiff law firm | Rozier Hardt McDonough PLLC | Law Firm | Representing Nearby Systems, LLCSearch in Eureka ↗ |
| Defendant counsel | Neil J. Mcnabnay | Attorney | Counsel for International Dairy Queen, Inc.Search in Eureka ↗ |
| Defendant law firm | Fish & Richardson LLP | Law Firm | Representing International Dairy Queen, Inc.Search in Eureka ↗ |
| Presiding judge | Judge N/A | Judge | Texas Eastern District CourtSearch in Eureka ↗ |
Official order — verbatim text
The stipulation is asymmetric by design: plaintiff’s claims fall with prejudice — creating a res judicata bar — while defendants’ counterclaims fall without prejudice, preserving Dairy Queen’s right to challenge patent validity in future proceedings. The court entered no substantive ruling on infringement or validity; the order is purely administrative. The ‘own costs’ provision and the absence of any fee motion under 35 U.S.C. § 285 suggest neither party sought to frame this as an exceptional case, consistent with a commercially negotiated resolution rather than a clear-cut legal victory for either side.
US11937145B2, US10469980B2 & US9532164B2 — location-based mobile service technologies
The three patents-in-suit — US11937145B2, US10469980B2, and US9532164B2 — form a family of related inventions covering location-based service architectures for mobile devices. The portfolio spans application numbers US16/570298, US15/346599, and US13/987520 respectively, indicating a filing timeline stretching from an original application (US13/987520) through at least two continuation or continuation-in-part descendants. This continuation structure typically reflects deliberate claim scope management, with later filings potentially broadened or narrowed to capture evolving commercial implementations of location-aware mobile features such as geofencing, proximity notifications, and check-in functionality.
For the quick-service restaurant and retail sectors, these patents represent meaningful IP risk. Location-based triggers — notifying users when near a store, enabling order-ahead on approach, or delivering personalised offers based on geolocation — are now table-stakes features in consumer mobile apps. Any company operating such features without a licence or a robust invalidity position relative to this patent family carries latent litigation exposure. The fact that Nearby Systems pursued Dairy Queen’s apps specifically suggests the claims are drafted broadly enough to read on mainstream proximity-service implementations, not merely niche use cases.
Should your mobile app team run an FTO against US11937145B2 and its family?
If your organisation operates a consumer mobile application incorporating geofencing, location-triggered push notifications, proximity-based ordering, or any store-arrival detection feature, this patent family warrants a formal freedom-to-operate review. The Nearby Systems portfolio has already produced at least one E.D. Texas filing against a major QSR brand — and with plaintiff’s claims against Dairy Queen resolved with prejudice, Nearby Systems’ enforcement programme is almost certainly ongoing against other targets in food service, retail, and hospitality.
PatSnap Eureka’s FTO Search Agent can map the independent claims of US11937145B2, US10469980B2, and US9532164B2 against your product architecture, surface prior art candidates that may support invalidity arguments, and identify continuation applications that may not yet have issued. This analysis is most valuable before a demand letter arrives — not after. Use Eureka to model claim scope, assess litigation risk, and build a defensible position against the Nearby Systems portfolio.
Run a freedom-to-operate analysis on US11937145B2 to assess your product’s exposure
Run FTO in Eureka →Similar location-technology patent cases filed in E.D. Texas
Explore related location-based mobile service patent disputes litigated in the Eastern District of Texas, including comparable proximity-tech and geofencing infringement actions.
What this case signals for the location-tech mobile app IP landscape
A fast, bilateral exit in E.D. Texas with prejudice on plaintiff’s side is consistent with a confidential settlement — and the patents remain live enforcement tools.
E.D. Texas remains a high-pressure venue for mobile app patent defendants
Nearby Systems filed in E.D. Texas — a perennially plaintiff-favoured jurisdiction. The 212-day resolution, before any claim construction hearing, suggests Dairy Queen chose commercial resolution over drawn-out litigation. Companies with consumer mobile apps using location services should audit exposure before litigation risk crystallises.
Three-patent assertion signals a portfolio licensing strategy, not a one-off filing
Asserting three related location-technology patents in a single case is characteristic of a licensing-focused entity building towards a royalty stream. The with-prejudice outcome resolves only this defendant family. Restaurant chains, retailers, and any operator of proximity-triggered mobile features should assume the same patents may be asserted against them independently.
Nearby v International — key questions answered
The case was dismissed with prejudice as to Plaintiff Nearby Systems’ claims pursuant to a joint Rule 41(a)(1)(A)(ii) stipulation filed by both parties. This mechanism requires agreement from all parties and no judicial approval of the merits. The with-prejudice designation means Nearby Systems cannot re-assert the same claims against Dairy Queen entities arising from the same accused apps. No infringement or invalidity ruling was issued.
Nearby Systems asserted three patents: US11937145B2 (App. No. US16/570298), US10469980B2 (App. No. US15/346599), and US9532164B2 (App. No. US13/987520). These patents cover location-based mobile service technologies and were asserted against the DQ Texas App and the Dairy Queen Food & Treats App. The three patents appear to form a continuation family based on their sequential application numbers.
Dairy Queen’s counterclaims — likely declaratory judgement of non-infringement and/or invalidity — were dismissed without prejudice, meaning they can be revived in future proceedings. This asymmetric outcome gives Dairy Queen residual leverage: if Nearby Systems asserts these patents against related entities or in different proceedings, Dairy Queen retains the option to pursue its invalidity arguments, potentially including via an inter partes review petition at the USPTO.
Nearby Systems LLC was represented by Rozier Hardt McDonough PLLC, with attorneys Carey Matthew Rozier, James Francis McDonough III, and Jonathan Lloyd Hardt on record. International Dairy Queen and the related defendants were represented by Fish & Richardson LLP, with Neil J. McNabnay as lead counsel of record. Fish & Richardson is a nationally prominent IP litigation firm; Rozier Hardt McDonough specialises in patent assertion matters.
No — the dismissal with prejudice binds only Nearby Systems’ claims against the named Dairy Queen entities. The three asserted patents (US11937145B2, US10469980B2, US9532164B2) remain in force and enforceable against third parties. Companies in quick-service restaurants, retail, hospitality, or any sector deploying geofencing or proximity-triggered mobile features should conduct their own freedom-to-operate analysis. This outcome should not be treated as a patent clearance event for third parties.
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